Popular Bitcoin analyst Plan B recently revealed an innovative trading strategy. He claims that he can make profits that vastly exceed those made by simply buying and holding Bitcoin.
Plan B’s new trading strategy revolves around the Bitcoin halving, which is attracting attention for its large returns.
Trading strategy about Bitcoin Halving
Bitcoin halving is an event that occurs approximately every four years. It has historically caused significant price increases due to a 50% drop in the rate of new bitcoins being able to be mined.
These events create a scarcity boom, which according to Plan B, these periods provide the perfect opportunity for savvy investors.
The plan B model, called the “stock-to-flow trading rule,” involves buying bitcoin six months before the bitcoin halving and selling it 18 months after the event. This trading strategy aims to exploit Bitcoin’s cyclical behavior. Thus, capturing the large price increases often seen around halvings while avoiding the ensuing bear markets.
The chain analyst made comparisons between the Bitcoin price trajectory and the results achieved by his strategy. In each case, the pattern outperformed the Bitcoin price trend.
The price of bitcoin is $30,000, so the strategy is (expect a) 4 times the price of bitcoin. We are waiting for the next buy signal and we already know that the halving will be around April 2024, so six months before that it is around October…. Then (Bitcoin) enters the market and will stay there for another two years until October 2025, 24 months later.” He said plan b
However, Plan B emphasized that the stock-to-flow trading rule is not a prediction model. Instead, it is a strategy that uses specific buying and selling rules to dictate market participation periods.
The Bitcoin market cycle plays a pivotal role
Implementing this strategy requires a thorough understanding of the Bitcoin Market Cycle. According to Plan B, form He specifies The current stage is known as the “early bull market”.
The next phase, where significant price jumps occur, is expected to begin around the time of the next Bitcoin halving event, scheduled for April 2024.
As bitcoin enters the final stretch ahead of the next halving, traders are anxiously watching for signs of a late bull market phase. In previous cycles, the transition to the green phase began shortly after the Bitcoin halving, which accelerated the bull run.
Despite these encouraging historical trends, the outcome of the upcoming Bitcoin halving remains uncertain. Factors such as black swan events can delay or disrupt an expected price hike.
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